By S.K.Nag
Indian democracy urgently calls for policy modification to promote subsidized living to make the whole nation survive this emerging challenge from pandemic-led injury. The stress under which the citizens are making their ends meet is utterly disgraceful, leading to despair. For immediate alleviation, Govt must restore all subsidies for at least two years from now. Besides other necessary economic interventions, subsidized diesel to the essential transport sectors is needed now. This subsidized fiscal structure will provide elbow room to the entire supply chain sector to reduce the overall cost of transport, reducing the pressure on mounting inflation.
Foodgrains and vegetable prices that have risen beyond the ordinary person’s reach must be controlled by some extraordinary economic intervention. The poverty line definition should include more citizens to stimulate the country’s economic sentiment as a whole. Diesel price has a more profound & wider ramification in any developing economy. The Indian volume of agro-economic transactions is one of the biggest in the world and has a respectable influencing position. Therefore the movement of agro-products across the country consumes a lot of diesel. Historically diesel being an easy and potential target of revenue generation for the govt exchequer. So with little effort, any government for incremental tax revenue had increased tax on fuel to make up their budget deficit. Understanding the increased burden on govt exchequer resulting from pandemic led lockdown has substantially shrunk the economy’s volume. Therefore, it is for the government to look into every line item in the fiscal structure that can potentially nudge the economy positively. The poverty line should indicate the benefit to the poor, but the size of the poor population has increased after Covid. It has orphaned many children and families, taking away their parents and employing members of the family.
Fighting poverty has two layers – either increase income or rationalize expenditure. Govt fiscal engineering can also have the same. But providing financial support is a short-term approach that may not have the desired result. But cutting down the volume of consumption needing subsidy expenditure may yield sustainable and long-term outcomes. This reduced subsidy expenditure can be diverted to support the subsidized living model of the economy for a couple of years.
Promoting electric and solar vehicles will bring down the volume of fuel consumption. Extended Govt support to restore normalcy should be the 1st level of governance system that we must have in our EFGH system. Employment, Food security, Good governance & Health infra to be augmented with closer focus by PMO. Daily achievements need a significant analysis to assess the progress. Cumulative efforts sometimes give rise to promising symbiotic results conducive to live and let live. Microlending is the need of the hour with easy facilitation by financial institutions.
Conclusively the political structure of our country must understand that we need subsidized living for a couple of years to get our economic health back on track. Otherwise, we will miss the bus again to reach our GDP target to occupy the most coveted world 3rd position.
(Author is Political & Economic analyst. The views expressed are personal opinion of the author. He can be reached at [email protected])